Why the Human Brain Craves Employee Recognition

If you listen to the very basics of psychology, you already know that recognizing people for their achievements satisfies human desires. Once you step above hunger, clothing, and shelter, humans seek more. Employee recognition programs can be one of the biggest win-wins for a company: employees feel happy and satisfied, and your company has an engaged workforce.

Companies with peer-to-peer recognition programs are 35% more likely to report lower turnover

When asked what management could do to improve engagement levels, 58% of employees said “give recognition”

The majority of your workers just want appreciation for a job well done. And if you have a culture built around praising your employees for their hard work, it’s not a hard thing to do. So why is giving thanks so hard for some companies?

It’s Not All About the Money, Money

For any leader who is primed and ready to argue they just do not have the money to implement a recognition program, not so fast. Companies only spending less than 1% of their payroll on recognition are 79% more likely to see stronger financial results, according to SHRM/Globoforce.

So money should never be your obstacle to acknowledging your employees.In fact, not only do you not need boatloads of money to implement employee recognition that will make your employees happier and more engaged, but McKinsey has also shown that nonfinancial incentives are even more effective motivators for employees than financial incentives. “Praise and commendation from immediate managers” and “attention from leaders” beat out both cash bonuses and pay increases when it comes motivating workers.

To drive the point home, Psychology Today reported that 70% of employees reported that their most meaningful recognition “had no dollar value.” "It’s not in the budget" is no longer an acceptable excuse.

Getting in Your Employees’ Heads

Let’s get back to psychology. Why exactly is being recognized by peers and managers so important to employees? For that, you just have to ask psychologist Abraham Maslow. In Maslow’s famous hierarchy of needs, human needs form a pyramid, with the basics like safety, food and water, and shelter at the bottom. Once these needs are met, human needs get more emotional.

“Belonging” and “esteem” are massive drivers of our human selves — yes, even in the workplace. Employee recognition can meet both of these higher-level human needs. Just think of that feeling of appreciation and belonging you get when your manager gives you a big thank-you for your work on a project or when a peer calls out your strong work in a meeting. This is hugely valuable. And why? Because it’s a basic psychological need.

You don’t have to be a psychology savant to understand why it’s crucial to your business to have an effective employee recognition program; you just have to be in tune with the human mind.